The Dividend Cafe

Today's Blogpost - https://bahnsen.co/3mK2RRS Today we are going to talk about something no one else seems to be talking about, and that may be one of the worst things imaginable for financial media ratings if it ever gets out. It is not controversial. It is, to me, somewhat obvious. But it is highly counter-cultural, and as I say, for many, it is highly problematic. Jump on into the Dividend Cafe! Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Today's Blogpost - https://bahnsen.co/3YGi43n A big market sell-off again now means the market has gone up 1,000 points and down 1,000 points in the last nine days. And Happy Anniversary (14 years ago today) to the generational market bottom in 2009 out of the Great Financial Crisis! Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Today's post: https://bahnsen.co/3SXObdT Key Economic Points of the Day: ADP reported 242,000 private sector jobs created in February. The correlation between the ADP and BLS numbers each month has not been very tight for a while now. Job openings came in at 10.82 million for February, 300k higher than expected. It had been 11.2 million last month. The trade deficit came in at $68.3 billion in February, a little less than expected. Total trade was up +7.6% versus last January ($18.1bn), indicating ongoing improvement in supply chain conditions versus a year ago. ASK DAVID “I noticed Sen. Elizabeth Warren grilling Jerome Powell yesterday, and her main point (that the primary causes of inflation and the only tool the fed has to fight inflation are disconnected) sounded familiar. Would you have ever guessed that you would find common ground with a left-wing Senator from Massachusetts? She did have to get price gouging theory in there though …” ~ Jack B. I’ve said this countless times – that though the progressive’s motives are to pin the blame for inflation on “capitalist greed” (the most preposterous theory imaginable), the right’s agenda here will leave them regretting it when economic opponents are the ones making the case that, no, people having jobs is NOT inflationary. Inflation is a highly toxic issue politically, no doubt, and parties not in power will make hay of it when they can just out of political reality. But the need of the hour is economic growth, and for the right to join the fray in alleging that growth and jobs are inflationary is absurd. For Elizabeth Warren to be the one making the case that the Fed is about to do more harm than good is heartbreaking to this movement conservative. Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Today's Post - https://bahnsen.co/3mrIiJz Key Economic Point of the Day: Futures market completely flip-flopped – went to a 70% chance of a half-point hike at the next meeting, with a 30% chance of a quarter-point hike (had been 30% and 70% just yesterday) ASK DAVID “What do your most recent observations in the city tell you about the state of the New York City office market?” ~ Anthony The fact of the matter is, anyone walking around the 40’s or 50’s (streets) on Tuesday through Thursday can tell offices are not merely 50% occupied in midtown – it is closer to 85% on those days. Where the vacancies lie are in bad and antiquated “old” products. The better quality class B and certainly class A office product is full 3-4 days a week, and tenants are renewing leases. A 10% vacancy rate that has gone to 20% inclusive of ALL NYC office products is really not that bad considering everything that has transpired. If you asked any office landlord 30 months ago if they would be content with the scenario they face now by February 2023, they would have killed for it. The leverage landlords are carrying is case by case, too, but if you all are asking whether or not foot traffic is back, New York City is utterly packed. There are moving parts, no doubt, and a new and class-A product is in the best position. But once again, the death of office, the death of going to work, and yes, the death of New York City, as painfully misdiagnosed. Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

I have written about excessive indebtedness many times in these Dividend Cafe pages, including a piece nearly two years ago that I think has held up quite well.  Lately I have written about Japanification, which is not quite the same topic (though there is certainly heavy overlap). I have long believed in treating the disease, not the symptoms, and I didn't even go to medical school (in fact, if I had, it seems these days I'd be less likely to believe that).  That may be an overused cliche, but it has utility when it comes to how we think about our personal lives, our health, our finances, and so many other things.  And when it comes to the issue of Japanification I think the overall subject will be served to look with more granularity at the nature of the excessive debt to which I refer. This is a seriously action-packed Dividend Cafe, and if you do not agree after reading it you are entitled to a full refund of your subscription price. Let's jump in to the Dividend Cafe ... Blog post here: https://bahnsen.co/3KMCDrK Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Today's Post - https://bahnsen.co/3ZCSvkX So the market followed its robust January returns with a -4% drop in the Dow for February and a -2.5% drop in the S&P 500, and the bond market dropped -2.7% on the month (though almost every index we track across stock and bond markets was still positive on the year through February, just much less so than previously). A few comments on today’s action here Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Blog post here: https://bahnsen.co/3KW53PY ASK DAVID “In your recent random walk in the Dividend Cafe you mentioned ‘full expensing of all capital expenditures’ as part of your prescription for avoiding Japanification. Will you please explain why this is necessary and what impact it will have?” ~ Luke L. I think one of the major tenets of Japanification is “low/slow/no growth,” and therefore, an obvious antidote (tautologically) is “growth.” I think the testimony of history is a clear and particularly recent experience that in a period of low capital expenditures, which are needed to improve productivity, which is needed to generate growth, removing disincentives to such productive investment is key. Forcing businesses to make large (and risky) investments NOW, but only to deduct that expense over time, is a disincentive. Immediate cash expensing incentivizes capex, which drives productivity, which drives growth. Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

This is Trevor Cummings filling in for David Bahsen as he is traveling back to our New York office today. First and foremost, I want to encourage you to check out David’s Dividend Cafe published on Friday. David covered a myriad of topics in a potpourri fashion, and all of these tidbits are what bubble up from actual clients and readers’ questions. Having attended countless number of David’s speaking engagements, the concluding Q&A is always my favorite; the Dividend Cafe this week reminds me a lot of one of those Q&A sessions. Alright, without further ado, let’s jump right into what was happening in Markets today as we close out the month of February. Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Well, I am back from my family’s little jaunt through the Bahamian Seas and am grateful to Brian Szytel for filling in with the DC Today for a few days last week. I hope you will find today’s old-school long-form DC Today informative. I will bring you the DC Today from New York on Wednesday and Thursday this week, as well as Dividend Cafe on Friday. Trevor will handle DC Today duties tomorrow as I fly after the market close to the world’s greatest city. Blog post here: https://bahnsen.co/3ksS6me Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

As I am out of the country these last few days with my family on a brief trip as the kids enjoy a week out of school, returning today, I am doing this week’s Dividend Cafe “old school” – which is to say, jumping around topic to topic and answering a handful of questions along the way. I love the “single topic” Dividend Cafe writings each week, but every now and then, it is fun to mix it up a little, especially from a top-secret overseas destination! Let’s jump into the Dividend Cafe … Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com